Young children with mental retardation require effective early language intervention to support learning and use of the formal and functional features of communication. For most of these children, difficulties in learning and using language in social communicative contexts are defining features of their disability. Significantly, these children's communicative deficits are often accompanied by difficulties in social interaction. Naturalistic language intervention strategies, particularly Enhanced Milieu Teaching (EMT), have been shown to have positive effects on the development of communication skills in children with mental retardation; however, extending the generalized effects of early intervention, predicting the effectiveness of this treatment approach and examining the effects of this intervention on children's social relationships remain important areas for research. The specific aim of the proposed project is to assess the effects of naturalistic early language intervention strategies on the communication skills of young children (ages 2-1/2 to 5) with mental retardation and significant language delays. The project has two phases. First, in a randomized experimental design (N= 90), we compare the effects of Enhanced Milieu Teaching (EMT) provided (a) collaboratively by therapists and parents with provisions for promoting parent generalization to home interactions and (b) by therapists in the clinic and home settings. We assess the effects of the interventions on children's language production in the clinic during training, on standardized assessment protocols, and home in interactions with their parents. Child, parent, and home environmental variables that predict child generalization will be examined in the analysis of treatment outcomes. The same 90 children will participate in the second phase of the study. Phase 2 examines changes in children's relationships with their primary caregiver and their social interactions with peers longitudinally, beginning before intervention and continuing for 18 months after the intervention is completed. Together the two phases of the study provide a thorough comparative analysis of the effects of naturalistic language training on children's language development and use in important social contexts.